Vietnam Extends Fuel Tax Suspension Amidst Iran Conflict

Vietnam has extended the suspension of taxes on fuels until the end of June to stabilize its domestic market amidst ongoing disruptions caused by the Iran conflict. This move, while easing consumer prices, is projected to reduce government revenue substantially as fuel prices continue to surge.

In a bid to stabilize its domestic market amidst disruptions caused by the ongoing Iran conflict, Vietnam has decided to extend the suspension of taxes on fuels until the end of June, according to a statement by the country's parliamentary office on Sunday.

The National Assembly has passed a resolution to suspend environmental protection and special consumption taxes on fuels, continuing the tax relief measure that has been in place since late March. The suspension aims to ease pressure on consumers but is expected to significantly impact state revenues.

As a result of the U.S.-Israeli conflict in Iran, fuel prices in Vietnam have seen a sharp increase, with gasoline prices up by 17% and diesel prices rising by 70%. The finance ministry has stated that the tax suspension is projected to reduce monthly government income by 7.2 trillion dong. Meanwhile, Vietnam's consumer prices rose 4.65% in March, challenging the country's goal to maintain inflation at 4.5% for the year.

(With inputs from agencies.)